In the often-turbulent world of cryptocurrency and its intersection with politics, bold claims are not uncommon. Recently, Cardano founder Charles Hoskinson presented a compelling, if controversial, narrative, attributing significant shifts in both crypto policy and market dynamics to a single event: the launch of the TRUMP token. He argued that this memecoin, introduced just three days before former President Donald Trump’s inauguration, single-handedly derailed a crucial 70-vote Senate majority for the CLARITY Act and transformed a unified crypto policy push into a partisan battle. Furthermore, Hoskinson linked the token's launch directly to the Bitcoin-only rally that characterized 2025, suggesting that what he termed “government interference” and the accompanying “Trump scandal” distorted capital flows, locking investment into BTC and away from altcoins.
It's a powerful story, painting a picture where one controversial decision by a political figure could unravel an entire industry's legislative progress and market setup. However, when we delve into the detailed legislative records and market data, a more intricate and nuanced picture emerges, suggesting that while the TRUMP token certainly added fuel to the fire, it might not have been the sole or primary catalyst for these profound changes.
Hoskinson's Bold Claims: A Policy Derailment and Market Distortion
Hoskinson's argument rests on two main pillars. First, he asserted that in December 2024, the crypto industry was on the cusp of a major legislative victory.
“We were expecting about 70 senators to vote for the CLARITY act and a super majority of the house,” Hoskinson stated in an interview.
He believes the premature launch of the TRUMP token before this critical bill could pass fundamentally altered the perception of crypto, shifting it from a bipartisan issue to one irrevocably tied to Donald Trump, branding it as "bad" and synonymous with "corruption."
His second key assertion concerns the market. Hoskinson contended that the fallout from the TRUMP token and the perceived government interference it invited directly led to the Bitcoin-only rally of 2025. According to him, this scandal distorted typical market flows, discouraging investment in altcoins and channeling capital predominantly into Bitcoin. The implication is clear: without the TRUMP token, altcoins would have flourished alongside BTC, and crypto policy would have enjoyed smooth sailing through Congress.
The Legislative Labyrinth: A More Complex Reality
While Hoskinson's concerns about the TRUMP token's impact on legislative efforts are not entirely unfounded, the idea of a guaranteed 70-vote Senate majority for the CLARITY Act in December 2024 lacks concrete public documentation. The actual legislative journey of crypto policy was far more complex and predated the memecoin's launch.
- Pre-Existing Political Ties: Long before the TRUMP token, the former president had already made inroads into the crypto world. He campaigned as “the crypto president,” successfully raised substantial funds from the industry, and established a lucrative deal with World Liberty Financial. This venture, in which his family reportedly held a significant share of token and fee revenue, alongside its stablecoin USD1, had already begun to raise ethics concerns well before the TRUMP token even existed.
- Maxine Waters' Intervention: The first tangible legislative fallout indeed occurred when Representative Maxine Waters, a prominent figure in financial oversight, abruptly canceled a joint House Financial Services and Agriculture hearing on crypto market structure rules. Crucially, her stated reasons explicitly cited Trump's memecoin and World Liberty Financial as instances of abuse of power. However, her objection was not an attack on crypto itself, nor a sudden partisan opposition. Instead, it centered on profound questions of self-dealing and conflicts of interest. Waters argued that she could not ethically preside over a hearing on market structure rules while the sitting president was actively operating a memecoin and stablecoin empire that stood to personally benefit from any regulatory framework they might create. This distinction is vital: it highlighted Trump's projects creating unavoidable conflict-of-interest questions, rather than Democrats suddenly deciding that “crypto equals Trump.”
- Legislation Endured, Albeit Differently: Despite the drama and canceled hearings, the legislative process did not grind to a halt. House Republicans, alongside a segment of Democrats, continued to advance core bills. By mid-2025, the House successfully approved the GENIUS Act, focusing on stablecoins, and the Digital Asset Market Structure CLARITY Act. While these bills passed with bipartisan votes, the support was far from unanimous. Coverage from the time frequently noted that “many Democrats fiercely oppose” the package, viewing it as overly friendly to the industry and excessively intertwined with Trump's personal financial endeavors. This legislative coalition looked distinctly different from the broad, almost universal support Hoskinson envisioned, characterized by a largely unified GOP alongside a minority of Democrats, with strong pushback from progressive factions and ethics watchdogs.
Ultimately, the bipartisan path for crypto was always fragile, contingent on the White House avoiding any appearance of using regulation as a vehicle for presidential enrichment. The TRUMP token did not create partisan opposition from scratch but rather exposed and exacerbated existing conflict-of-interest issues that many Democrats were already apprehensive about. Even after the initial backlash, Congress managed to pass the GENIUS Act and move CLARITY out of the House, demonstrating that the memecoin did not entirely kill the legislative momentum.
Untangling the Bitcoin-Only Phenomenon
Hoskinson also linked the Bitcoin-only rally and the lagging performance of altcoins to “government interference” and the memecoin saga. However, market data and independent analyses from 2025 paint a different picture, pointing to a confluence of structural drivers rather than a single political event.
- Spot Bitcoin ETF Inflows: A significant factor was the unprecedented institutional and retail flow into spot Bitcoin ETFs. Research consistently showed that new ETF buyers overwhelmingly concentrated their investments in BTC, a pattern that “shifted capital away from the broader altcoin market.” This demand treated Bitcoin much like digital gold, with dips consistently bought and pumps sustained, while altcoin liquidity remained comparatively thin.
- Maturing Market and Risk Appetite: Independent reports from platforms like CoinGlass and other derivatives desks frequently highlighted “persistent weakness in ETH and the broader altcoin market.” This was attributed to a reduced risk appetite among investors, increased competition within the altcoin space, and a perceived lack of truly novel “killer apps” outside established ecosystems. The market was maturing, becoming more cautious, and investors were consolidating holdings in assets perceived as less risky.
- Bitcoin Dominance: Throughout mid-2025, Bitcoin dominance, its share of the total crypto market capitalization, consistently ground higher, often resting in the mid-60s to 70% range. This trend persisted even during periods of broader market upswings, clearly indicating a preference for Bitcoin over most altcoins.
- Altcoin-Specific Hurdles: When examining individual altcoins like XRP or SOL, their performance was often driven by product developments and, crucially, regulatory plumbing. Factors such as ETF approvals and pauses for specific altcoins, the ongoing uncertainty surrounding which assets the SEC would tolerate in exchange-traded wrappers, and uneven institutional custody support played pivotal roles. For example, when the SEC approved and then later paused a Bitwise altcoin index ETF conversion, XRP and other major altcoins experienced significant volatility due to this specific regulatory uncertainty, rather than the broader TRUMP drama.
While Trump’s memecoin and the World Liberty scandals undoubtedly added headline risk and made some institutions more hesitant about crypto exposure, especially with unresolved ethics questions, the primary reasons for the “Bitcoin first, maybe alts later” cycle were fundamentally structural. Bitcoin became the clearest institutional trade due to ETFs and easier integration with traditional finance. Regulatory clarity was far greater for BTC and, to a lesser extent, ETH, compared to the vast majority of altcoins. Risk appetite and true innovation remained concentrated within a select few Layer 1 ecosystems. None of these underlying trends required the TRUMP token to exist.
Optics Versus Data: A Complex Picture
Charles Hoskinson is correct on one crucial point: the optics. Launching a presidential memecoin just before a major regulatory bill was destined to complicate the political landscape. Representative Waters’ May statement serves as concrete evidence of this; she explicitly stated her inability to negotiate market structure while the president was monetizing his office through the very instruments under discussion. This created an undeniable ethical dilemma and fueled political friction.
However, the broader causal claims Hoskinson makes encounter significant challenges when confronted with the data. There is no documented evidence of a 70-vote Senate coalition for CLARITY in December 2024. Instead, a fragile bipartisan opening existed, which was indeed made politically harder for Democrats by Trump’s growing crypto empire, encompassing World Liberty first, and then the TRUMP token. These ventures raised legitimate concerns about self-dealing and potential abuse of office. Similarly, while the TRUMP token added a layer of political uncertainty, the overwhelming evidence suggests that the Bitcoin-only rally and the lagging altcoin market were predominantly driven by structural market shifts, institutional investment trends, and evolving regulatory landscapes, rather than being solely or primarily a consequence of a presidential memecoin.
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